4. Western Digital Corporation (NASDAQ:WDC)
FWD PE Ratio: 8.80
1-Month Stock Price Performance: 10.14%
Number of Hedge Fund Holders: 80
Western Digital Corporation (NASDAQ:WDC) has established itself as a leading name in the data storage industry. It specializes in the manufacture and sale of a wide range of storage solutions. It ranks 4th on our list of cheap rising stocks to invest in.
In the second quarter, 80 hedge funds tracked by Insider Monkey held positions in the company and their stakes amounted to nearly $4.06 billion. As of June 30, Millennium Management is the most dominant shareholder in the company and has a position worth $379.707 million.
The company focuses primarily on hard disk drives (HDDs) and solid-state drives (SSDs). Its comprehensive product offerings cater to various needs, including HDDs for personal computers, laptops, and enterprise storage systems marketed under the Western Digital and WD brands.
Additionally, high-performance SSDs are available under the SanDisk brand, known for their speed and reliability, serving both consumer and business markets. The company also develops embedded storage solutions for automotive and industrial applications, along with memory components for smartphones and other electronic devices.
A recent discussion by Rob Soderbery, executive vice president of the Flash Business Unit at Western Digital (NASDAQ:WDC), highlighted the company’s ambitious plans regarding artificial intelligence and machine learning, among other things.
Soderbery said that the company is actively integrating AI into its engineering processes. It is expected to generate around $100 million in productivity gains over the next two years, allowing for reinvestment in growth areas.
Moreover, he mentioned that the company is set to undergo a significant transformation by splitting its business into two publicly traded companies, a move expected in the second half of this year.
One business will concentrate on HDDs, while the other will focus on flash memory products. The separation, described as a “soft-spin,” aims to enhance clarity and focus on each business segment, allowing Western Digital (NASDAQ:WDC) to allocate resources and energy more effectively.
Lastly, the company has projected its revenue for the first quarter of fiscal 2025 to be between $4 billion and $4.2 billion, which signals a positive outlook for the company.
Parnassus Investments stated the following regarding Western Digital Corporation (NASDAQ:WDC) in its Q2 2024 investor letter:
“We re-initiated a position in Western Digital Corporation (NASDAQ:WDC), a manufacturer of memory semiconductor chips and hard disk drives, as we believe earnings expectations are far too low. Semiconductors have been another of our most-alpha-generative industries, thanks to the industry’s secular tailwinds and our in-house expertise. Western Digital stands to benefit from the rapid growth of memory-hungry AI applications. The valuation for Western Digital was low relative to its peers, giving us a way to participate in AI at a reasonable valuation.”
